1. Commercial Law
The contract of Sale

2. Definition:
The seller (vendor) promises to deliver a thing (merx) to another person known as the buyer(emptor) for payment of a certain price (pretium)

3. The 4 essential elements of sale
An agreement
To deliver
A specific thing
Can include a hope (spes)
At an agreed price
Price must be ascertainable & in money

4. Generally no formalities – but:
Parties may agree that no sale unless certain formalities complied with
Some Statutes require formalities

5. Statutory Formalities
Sale of land – signed & in writing
Credit agreements – in writing & signed by both buyer & seller
Sale of business – sale to be advertised

6. Rights of the Purchaser
To receive delivery of the merx
Does not mean seller must deliver, but must make available
Preservation of the merx pending delivery
Seller must look after goods until delivery. Risk passes on sale being perfecta but seller liable for negligent loss or damage
Purchaser to be protected against eviction
Sellers warranty against eviction
Purchaser entitled to merx free from latent defects

7. To pay the purchase price
Duties of the Buyer
To pay the purchase price
General rule – pay in legal tender upon delivery
To pay the seller’s necessary expenses
Costs of caring between sale & delivery, transfer costs
To accept delivery of the merx

8. When is the sale perfecta? Agreement on price Merx identified
The Passing of Risk
General Rule
The risk passes from the seller to the purchaser as soon as the sale is perfecta.
The parties may agree to change this, for example, for risk to pass on delivery
When is the sale perfecta?
Agreement on price
Merx identified
Any suspensive conditions fulfilled

9. Symbolic delivery – eg: keys to vehicle
Forms of delivery
Actual delivery
Symbolic delivery – eg: keys to vehicle
Delivery with the long hand – eg: pointing out cattle
Delivery with short hand – purchaser already in possession
Constitutum possessorium – seller retains on behalf of purchaser
Attornment – third party retains possession

10. Rei vindicatio – action for recovery of possession by true owner
Ownership
Rei vindicatio – action for recovery of possession by true owner
Passing of ownership
Seller must be owner at delivery
Seller intends to pass ownership
Buyer intends to acquire ownership
Seller must deliver to purchaser
Purchase price paid or credit granted

11. Immovable property – on registration of transfer
Transfer of ownership
Immovable property – on registration of transfer
Incorporeal property – on cession
Movable property – on delivery
If cash sale – price paid & delivery
If credit sale – on delivery

12. May be express or implied
Warranties
May be express or implied
A contract of sale always implies the following warranties:
Warranty against eviction
Warranty against latent defects

13. Latent defects
Defect existing at time of sale but unknown to ordinary buyer even if apparent to an expert
There is an implied warranty that goods are fit for the purpose for which sold
If latent defect - entitled to remedy unless:
Voetstoots or “as is” sale (parties agree to exclude)
No defect at time of sale
Buyer aware of defect and accepted
Prescription

14. The Consumer Protection Act prohibits the use of a voetstoots clause NB
The Consumer Protection Act prohibits the use of a voetstoots clause
This only applies to contracts covered by the Act